Coinbase Talks Lawsuit, Political Donations in Investor Letter

(Bloomberg) -- Coinbase Global Inc. drilled down on its ongoing legal issues with the US Securities and Exchange Commission as well as its political donations as it disclosed higher-than-forecast results for the first quarter.

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The biggest US crypto exchange referenced a Manhattan federal court’s decision in March to dismiss the SEC’s claim that Coinbase had acted as an unregistered broker through its Wallet offering in its shareholder letter, but also mentioned that the court denied the company’s request to dismiss the case entirely. The SEC alleged in a lawsuit in June that Coinbase sells unregistered securities and illegally operates as an exchange, a broker and a clearing agency in violation of federal securities laws.

“Clarity is the ultimate goal and the court’s decision continues us on that path,” the letter published Thursday said. “We remain confident in the strength of our legal arguments and are fully prepared for an intensive discovery phase throughout the remainder of the year.”

The crypto exchange also highlighted its political contributions, noting that it was a contributor to Fairshake PAC, a major super PAC in the US. The company said the political action committee supports pro-crypto candidates from both parties and that the pro-crypto movement is already having an impact, noting that in March primary elections, “crypto voters made their presence felt in key states like California, Texas, and Alabama by electing or helping pro-crypto candidates advance past the primaries.”

In one high-profile Senate primary in March, crypto lobbying efforts took credit for the loss of Democratic Representative Katie Porter, who had been outspoken against the digital asset industry.

In Coinbase’s earnings, revenue more than doubled to $1.58 billion, topping the $1.32 billion average estimate of analysts surveyed by Bloomberg. The company reported net income was $1.17 billion, or $4.40 a share, compared with a loss of $79 million, or 34 cents, a year earlier.

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